Remove Bad Credit

Bad credit can come back to haunt you. A history of late payments or unpaid debts can make it hard to buy a home, rent an apartment, or get a car loan. In fact, bad credit might even mean higher bills: bill providers are legally allowed to charge you more for having poor credit.

It doesn’t have to be this way, though. With a little homework and effort, you can nip your bad credit in the bud. The first step? Addressing the negative items on your report.

Read More

How to Remove Negative Items from your Credit Report

Step 1: Review Your Credit Report

Man using his computer
Before anything, you want to obtain a copy of your credit report. The good news is, it’s free, and it’s as easy as navigating to and requesting it. You’re allowed one free copy of your credit report each year from each of the three major credit bureaus: TransUnion, Equifax, and Experian. It’s important to keep an eye on all three, because sometimes there are discrepancies between them. For instance, your Experian credit report might have an error while your TransUnion and Equifax reports are perfectly accurate.

Once you get your copy, you’ll find an entire section dedicated to any and all negative items. These are the accounts dragging your credit down: outstanding credit card debt or an old utility bill you never paid, for example. These negative items are the accounts we want to fix.

According to Experian, here’s how long six common negative items stay on your report if you aren’t able to remove them:

Step 2: Look for Errors and Dispute Them

Once you’ve reviewed your potentially negative items, first make sure there aren’t any mistakes. There are a handful of different types of errors you should look for on your report:

If you do find an error, you’ll first want to notify the creditor. The Federal Trade Commission makes the process really easy with this sample letter. Fill in the blanks, then send the letter to the creditor, along with any documentation supporting your dispute. They’re obligated to investigate the items in question, usually within 30 days. If they agree that there’s an error, it’s their job to notify all three credit bureaus so they can fix your report. You can also request to have them send notifications to any agency that’s pulled your report within the past six months.

Read More

What if the account is already in collections?

Erasing mistakes
In another scenario, let’s say you’ve successfully disputed an item with the creditor, but they’ve already sent your info to collections. A debt collection company keeps calling you, asking you to pay money you don’t owe. If this happens, you can actually file a complaint with the Consumer Financial Protection Bureau.

Read More

Step 3: Try Removing Negative Items that Aren’t Errors

On the other hand, let’s say you’ve made some mistakes. You couldn’t afford to pay your credit card bill. Your student loan payments are sometimes late. Of course, the ultimate solution is to improve your financial habits; that much is obvious. In the meantime, though, you still have options for dealing with the negative items on your report.

For late payments, you can draft a “goodwill letter,” which is sometimes referred to as a “goodwill adjustment.” If you generally have a good history with a creditor, they’re often willing to forgive a late payment here and there and update your credit report accordingly. You’ll want to contact the creditor directly, either with a phone call or a letter. Either way, your request should include: